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Ike Shuts Down Gulf Oil Production

Posted on: Saturday, 13 September 2008, 15:00 CDT

The arrival of Hurricane Ike has shut down nearly 98 percent of the United States' Gulf of Mexico oil production, Interior Department officials said.

The hurricane also has socked 94 percent of the Gulf's natural gas production, the Washington Post reported Saturday. Along with Hurricane Gustav, it marks the second time in two weeks the Gulf region has virtually closed down its entire natural resources production pipelines.

By Friday afternoon, Ike forced oil producers to evacuate 596 production platforms, about 83 percent of the Gulf's total. For most of the past two weeks, more than 90 percent of the Gulf's production has been sealed off, the newspaper said.

"Ike couldn't have come at a worse time," Daniel Ahm, an energy economist at Lehman Brothers, told the Post. "Gustav had already ripped through with surprisingly little damage, but it is reminiscent of what happened with Rita and Katrina."

Oil industry analysts were also concerned about Ike's potential affect on Texas's massive oil refineries, where 23 percent of the nation's gasoline is refined. The refinery shutdowns could create near-term price hikes in gasoline and diesel fuel even as prices for crude oil remained weak, the newspaper said.

Source: United Press International

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